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Northern Rock has completed its redundancy talks with staff and confirmed 1,300 jobs have been cut. The nationalised bank is attempting to streamline its operations and cut costs in order to weather the credit crunch and repay its taxpayer loans.

Northern Rock confirmed 500 staff have taken up voluntary redundancy, while a further 800 were compulsory redundancies.

Those who are being made redundant have either left the firm already or will do so today.

The firm is now looking to sell or let some of its office space that it no longer needs, but will keep its main offices in Gosforth and Doxford Park.

Northern Rock is aiming to reduce staff numbers by around 2,000 in total by the end of 2011.

Ron Sandler, executive chairman of the bank, says: “This has been a very difficult period for the whole Company. The consultation process has been a substantial exercise and it has been undertaken carefully and thoroughly.

“All parties – staff, the management and Unite the union – have acted professionally and responsibly to ensure that the final outcome was achieved as sensitively as possible.”

The firm now has around 4,500 staff and hopes to wind down numbers through natural turnover during the next few years.

Borrowers coming to the end of two and three-year mortgage deals have been increasingly staying on their lender’s standard variable rate because the new fixed and tracker rate options were proving too expensive.

Since rates have started to nudge down however there are increasing signs that the attitude of borrowers is changing as they select new deals to move on to, often with different mortgage providers.

Rates are now well below 6.00% as the cost of interest rate swaps used to price fixed rate mortgages has declined. As a result Yorkshire Building Society recently reduced rates on its fixed rate mortgage range by up to 0.55% and has since seen application levels double.

Tom Girling, mortgage product manager for the Society said: “We are pleased to have seen application levels pick up. It is clear that our recent launch of a 5.54% two-year fixed rate with a £895 fee has triggered a swift uplift of mortgage applications. Now that there is clear water between typical SVRs of over 7.00% and the best two-year fixes it has focussed borrowers attention on getting their monthly costs down.”

Families are increasingly unable to help each other out, according to research from the Chelsea Building Society.

The society surveyed over 1000 family members and found that while 59% of people are willing to help their families – almost 30% are unable to do so due to the rising cost of living.

Families are countering this inability to help financially by offering more traditional assistance to each other. Most commonly this is in the form of providing accommodation free of charge to immediate family members (54%) and offers to look after children so that immediate family members can work (51%), far outweighing those who are prepared to make a specific financial sacrifice or extend a financial helping hand.

Only 15% of adults would take out a joint credit card with an immediate family member in financial straits.

When it comes to paying off a relative’s debts families are marginally more likely to loan money (29%) than give it (26%). This contrasts to when families help each other out with big purchases, when they are more likely to give money (13%) than lend it (10%).

Recent economic straits are bringing the family together financially, with grown up children still living with parents for free or reduced rent (13%) and grandparents occasionally subsidising school fees (7%).

Chelsea’s research showed a clear difference in attitudes towards lending to immediate and extended family members. As personal financial circumstances may become more stretched, families are understandably much more likely to lend to those closest to them. 22% said that they would remortgage their house to help out an immediate family member in financial difficulty’, but only 2% would take this step for a relative in their extended family.

Almost six out of every 10 Britons would be happy to help out their mothers financially, should they need it but less than half (45%) would offer the same assistance to their fathers. Nuclear family lending remains pretty stable, with 37% prepared to help their brothers or sisters financially, and 33 and 34% prepared to help out their daughters and sons respectively.

Britons have had a largely positive experience with lending money to family members. In 60% of cases when money is lent, it is repaid swiftly with thanks.

Darren Stevens, director of customer services at Chelsea Building Society, said: “Whereas previously Britons could rely on their family members to bail them out when they got into difficulty, now when they turn to their families as a last resort they might find that their families are also suffering the pinch. A lack of extra funds means that families have to help each other out in non-financial ways.

“Britons should start taking control of their own finances through proper financial planning and saving, bypassing a potentially embarrassing situation within their own families.”

Also, Abbey is cutting rates again on its two and three year fixed rate deals at 70% loan to value for loans of up to £250,000. Both deals are now available at 5.69%. This is a cut of 0.2% on the two-year deal, which has a fee of £995 and a cut of 0.1% on the three-year deal, which has a fee of £1,295.

Abbey’s head of mortgages, Phil Cliff, said: “Abbey is committed to offering a choice of mortgages so our customers can choose the most suitable deal for their needs. The new low fee options coming into the range on Monday suit people remortgaging. They will be great for people who have plenty of equity in their property and want a really competitive deal, whilst looking to keep remortgage costs to a minimum.”

Bradford & Bingley has reported a £26.7 million pretax loss for the first half of 2008.

The UK’s largest buy to let lender said bad debts were continuing to rise.

The board continues to be cautious on the economy and trading and expects the trends in arrears and net interest margin to continue.

Mortgages three months or more in arrears in the organic mortgage book rose to 1.78% and within B&B’s acquired mortgage book the number increased to 5.11% from 3.04%. The total number of cases across the whole mortgage book three months or more in arrears was 2.29%

B&B is planning a reduction in mortgage balances and says it is currently working with GMAC-RFC to renegotiate its contract.

Rod Kent, BB’s chairman, said: “In the light of the turbulence in the banking and housing sectors, the first six months of this year have been very challenging for B&B. Although we clearly signalled this at our announcement on 2nd June, the results for the half year are, of course, disappointing.”

The FSA is calling on the mortgage broker community to help it tackle mortgage fraud.

As part of its attempts to crackdown on fraud, the regulator is publishing new guidance for mortgage brokers and hopes they will co-operate to help it deal with the problem.

The FSA says brokers are responsible for reporting any suspicions they have regarding fraudulent activity or poor practice that has come to their notice.

Brokers have provided the FSA with useful leads in the past, and the regulator is hopeful that most brokers will be willing to co-operate to prevent a minority from damaging the industry’s reputation.

The new guidance for brokers, which can be viewed here, contains information on the regulator’s collaboration with lenders project, recent cases of fraud and advice on how to spot possible fraudulent activity.

Brokers should be on the lookout for faked documentation, exaggerated income and employment details and trends between clients.

Philip Robinson, director of financial crime at the FSA, says: “Mortgage fraudsters tarnish the reputation of the industry as a whole, and there is no place in the market for firms who are – or have been – knowingly involved in mortgage fraud.

“Our work will increase our effectiveness in identifying and tackling such firms. If we find evidence of fraudulent activity at a firm we visit, it can expect to be subject to immediate and intensive action.”

Brokers who do suspect fraud can report their concerns on the FSA’s website, or through the firm contact centre at fcc@fsa.gov.uk

House prices are falling at their fastest rate since 1990, when Britain was in the grip of a major economic downturn. The Nationwide’s latest house price index has shown double digit falls for the first time a year after the onset of the credit crunch.

The value of the typical British home fell 1.9% between July and August to £164,654, and has dropped by 10.5% since August 2007.

Fionnuala Earley, chief economist at Nationwide, says subdued activity for both estate agents and house builders indicates the downturn is likely to continue.

“The reported numbers of sales have not been encouraging,” she says. “The ratio of sales to stocks has been a good predictor of movement in house prices.

“Current movements suggest that the increased supply of properties on agents’ books will continue to act as a dampener to house price growth in the short term.”

Nationwide’s data also shows consumers are moving back towards fixed rate mortgages, after the proportion opting for tracker deals reached almost 35% in early 2008 before falling back to around 20% this summer.

However, Earley says the Bank of England’s latest inflation report suggests interest rates may be cut in the near future, but does not expect this to cause a major recovery for the housing market.

“There is still a great deal of uncertainty, but the Bank of England’s forecasts of growth and inflation have been widely interpreted as opening the door to rate cuts. Market rates have reacted to this and as a consequence mortgage rates, particularly fixed rates, have continued to come down.

“We expect the next move in the Bank Rate to be down, but the extent to which this will revive the mortgage and housing market is likely to be limited while overall confidence in economic and housing market conditions is low.”